6 Principles to Help You Become Rich: Most of Us Are Poor Because We Stop at Number 5
1. Principle of Avoiding Personal Debt
One of the important principles to help you become wealthy is to stay away from debt. Getting caught in debt only makes you anxious, always feeling like you are poor, having money that quickly runs out because you have to pay off debts, and in the end, you can't save anything. The main reason is that we have not equipped ourselves with basic financial knowledge. Imagine a person who doesn't know how to use a saw but is holding a very sharp saw; what risks could occur? The same goes for using money; if a person doesn't know how to use money but has too much of it, it can be just as dangerous. Money is just a tool; once you borrow to get a large sum but don't know how to balance it, the risk of drowning in debt is very high. If you are excellent at managing finances, borrowing money is not bad; it can even help money generate more money. However, most personal debt can destroy all your assets.
One principle to follow before you become wealthy is to never borrow money to buy a car, electronics, or anything that can depreciate in value. This is like having a small bag of blessings but borrowing a larger bag from someone else to spend; in the end, you are always in a state of "negative blessings," making the opportunity to get rich extremely slim. That's why people say that if you own assets worth 0 USD or more by the age of 20, you are doing much better than many of your peers. The reason is simple: many young people out there are burdened with mounting debts. If they cannot repay these loans, their lives will continue to spiral into debt in the future. If you want to start a business or invest in real estate, it is hard to avoid borrowing money. However, borrowing money also requires wisdom; you must think carefully before proceeding because "playing with money" is no different from "playing with fire" if you are not truly financially savvy. You should never be ready to accept the risk of losing everything just for the chance to make money. Don't start speculating with options hoping to get rich quickly. Recklessly borrowing beyond your means, mortgaging your home to loan sharks for investment or business will bring nothing but stress, debt, and depletion of both your assets and health.
2. Principle of Simplification
Nurturing the dream of getting rich, many new entrepreneurs use money (either their own or borrowed) to hire many employees, rent a beautiful office, and equip modern facilities to serve the employees' spiritual life... This has consumed a large part of the money that should only be focused on business and sales to generate revenue. Making money and building wealth is easy if you maintain diligence, keep costs low, and use money for good and long-term investments. In fact, many "big players" today started from their kitchens or family garages, like Apple starting from a garage. Therefore, the principle of simplification is very important at this time; you need to optimize everything to focus on the product, marketing, and sales... Always focus on how to simplify complex things. Looking at Apple, you will understand how they succeeded with just one button, defeating all types of mobile phones at that time.
To understand and apply this principle of simplification is a process of continuous exploration and creativity. In fact, simplicity is not simple because, in reality, more than 80% of people do not know where the essence of simplicity lies. Simplicity means being able to see through phenomena, grasp the essence of things, turning complexity into simplicity, and ultimately solving problems with the least possible processes. 3. Treat Money Like an Employee. Money cannot be evil nor is it something we must worship as many people think. Simply think of it as an indispensable companion in our lives. The wealthy mindset is to see it as a hardworking employee, tirelessly earning money for us every day, never complaining because its capabilities are limitless. Only then can you "delegate tasks" appropriately so that it can maximize profits for us. With smart investments or sufficient savings, the money you have will provide enough passive income for you to live comfortably in old age. Experts often give examples of compound interest as follows: An 18-year-old saving 50 USD a month (over 1 million VND) with a return rate of 7% per year throughout their career will retire at 65 with nearly 2,000,000 USD (approximately 44 billion VND). At 75, the amount increases to nearly 4,000,000 USD. Increase the return to 10%, and the amount will be 13,665,700 USD. This is the essence of money and making money.
4. Principle of Rehearsal
There is a saying: "Sweat in training, blood in battle," meaning that rehearsing enough gives us experience so that when we go into reality, we can minimize potential risks. This means that before using money, especially for large investments, we need to rehearse possible scenarios in our minds and always find out what solutions are needed. The solutions created by this calculation process are called rehearsals. Just like organizing an event, the performers in the event also need to go through many rehearsals; otherwise, when problems arise, they won't know how to handle them in time. The more rehearsals you have, the more you minimize potential risks and increase the success rate to the highest level. Similarly, if you want to start a successful business, you need to have a sufficiently detailed plan. From strategies, potential difficulties to timelines. From there, continuously learn and improve to enhance both yourself and your experience. Even in investing, for a "newbie" in the stock market, the risk of losing money is very high. Therefore, you can rehearse by "pretending" that you have bought a few stocks with a certain amount of money and start tracking them for at least a year, recording the process of increases and decreases, when they spike or drop suddenly due to news... Each time you know how much your stock has increased or decreased, and the reasons behind it, you will understand much more than what investment books have mentioned.
5. Principle of Action
Just thinking without acting will not yield any results, so one of the principles to help you become rich is that after "rehearsing," you need to take decisive action. The gap between theory and action is always very large, so if you spend all day hugging investment and business books but do not actually get down to doing business or investing, they remain just a pile of useless information. For example, in stock investment, after "rehearsing," you can start taking action by investing a small amount of money into stocks that you find suitable for your criteria and risk appetite during the observation and "pretend" investment period. After that, you can increase the amount depending on the actual circumstances.
6. Principle of Perseverance
Getting rich has never been easy, so the percentage of wealthy people in society is not high; they are not necessarily smarter than us; they just apply the above 5 principles persistently and diligently until they reach their goals. It is a process of continuously making mistakes and correcting them, learning from experiences to make appropriate and wiser changes to achieve their ultimate goals. Inamori Kazuo, known as one of Japan's four "business legends," once said: "Achieving a goal is like climbing a mountain; improving your abilities is a dynamic process, never let current thoughts limit your future thoughts." Meanwhile, those who fail do so because they are too fond of short-term benefits; they want to quickly receive rewards for their efforts, valuing the ability of one year while underestimating long-term benefits over ten years. Therefore, they quickly become discouraged when they do not see the success they desire after 1-2 years of effort. Lack of consistency with their goals is a factor that makes it difficult for many people to succeed. Remember the image of bamboo; before it can grow to 15m in 6 weeks, bamboo has to spend 4 years "hibernating," lying still in the ground, rooting in the soil, growing several hundred meters underground to provide energy and ensure safety for its strong development in the future.
Sharing on Heraldtribune, Peter said: “I have lived an extraordinary life, not because of my father's money but because of his exemplary way of living that has influenced me greatly. Not for a moment did I choose money over the experiences and lessons I have. My life is much richer. My siblings probably feel the same.” Even though they are the children of the richest man in the world, it can be seen that Warren Buffett's children do not receive any special privileges. But ultimately, Warren Buffett's unique way of raising children has also yielded expected results at the age of 92. Therefore, those who are currently enjoying brilliant success have actually gone through a long period of "hibernation." All success comes from effort; if you still think it is due to luck, it means you have eliminated your opportunity to get rich.